RPM reports fiscal 2012 second-quarter results

01.10.12

RPM International Inc. reported improved net sales for its fiscal 2012 second quarter ended November 30, 2011. Net income increased slightly and earnings per diluted share were flat, due to higher raw material and acquisition-related expenses.

Second-Quarter Results

Net sales grew 10.9 percent to $916.1 million from $826.3 million a year ago. Consolidated EBIT increased 4.0 percent, to $93.0 million from $89.4 million in the year-ago second quarter. Net income attributable to RPM stockholders was up 2.3 percent, to $49.9 million from $48.8 million in the fiscal 2011 second quarter. Earnings per diluted share for the second quarter were $0.38 in both years.

"Investments in future growth, including much higher acquisition expenses associated with the roughly $165 million in annualized sales from businesses acquired so far this fiscal year, and higher raw material costs were the primary factors behind our net income lagging sales growth," said Frank Sullivan, chairman and chief executive officer. "Raw material costs continued to be a challenge during our second quarter and typically have a more significant impact on our consumer segment, which faces longer lead times in adjusting prices than our industrial segment."

Earnings for the second quarter of fiscal 2011 and 2012 were both impacted by "one-time" items. As previously reported, last year's second quarter contained approximately $7.5 million in non-recurring items, representing an after-tax benefit of approximately $0.04 per share.

This year's second quarter results of $0.38 per share include the benefit of the company's equity ownership in Kemrock Industries and Exports Ltd. of $0.04 per share, partially offset by $0.03 per share from the impact of higher acquisition-related expenses.

Excluding "one-time" items from both years, diluted earnings per share for the fiscal 2012 second quarter of $0.37 exceeded diluted earnings per share for the same quarter last year of $0.34, for an increase of 8.8 percent.

Second-Quarter Segment Sales and Earnings

During the second quarter, industrial segment sales grew 10.1 percent to $641.5 million from $582.5 million in the fiscal 2011 second quarter. Organic sales improved 5.9 percent, including 0.2 percent in foreign exchange translation losses, while acquisition growth added 4.2 percent. Industrial segment EBIT increased 14.0 percent, to $78.3 million from $68.7 million in the fiscal 2011 second quarter.

In the second quarter, RPM's ownership position in Kemrock, India's leading producer of reinforced polymer composites, exceeded 20 percent for the first time, thereby triggering a reportable equity ownership position in a portion of Kemrock's earnings. As a result, the industrial segment's EBIT included $5.2 million in equity in earnings of Kemrock, of which $4.6 million related to a one-time cumulative catch-up benefit. Industrial EBIT also included higher acquisition-related expenses of $1.8 million, partially offsetting the Kemrock benefit.

RPM's consumer segment sales increased 12.6 percent to $274.6 million from $243.8 million in the fiscal 2011 second quarter. Organic sales improved 12.5 percent, with no foreign exchange impact, while acquisition growth added 0.1 percent. Consumer segment EBIT fell 2.0 percent, to $26.8 million from $27.3 million a year ago.

Corporate and other expenses were higher by approximately $5.4 million, due primarily to higher acquisition costs of $3.0 million and insurance recoveries of $2.9 million realized in the prior-year second quarter.

"We reiterate our full year guidance announced on July 25, 2011, which anticipated sales growth of eight percent to 10 percent and growth in diluted earnings per share of 10 percent to 15 percent. As usual, we expect weaker results for the seasonally difficult fiscal third quarter ending February 29, 2012, but anticipate a strong fiscal fourth quarter, with continued strength in top-line sales from both our industrial and consumer segments, combined with a moderating of raw material costs and improved gross margin contribution," Sullivan said.

Related Financial News

RPM International Inc. reported sharp gains in net sales, net income and diluted earnings per share for its fiscal 2012 fourth quarter and year ended May 31, 2012.
Net sales and net income were up significantly over prior-year results. Net sales gre…

RPM International Inc. reported double-digit increases in sales and net income for its fiscal 2012 first quarter ended August 31, 2011.
Fiscal 2012 first-quarter net sales of $985.9 million were 10.2 perccent ahead of the $894.8 million report…

RPM International Inc. reported that on a pro-forma basis, improvements were realized in net sales, net income and earnings per share for its fiscal 2011 second quarter ended November 30, 2010. Prior-year pro-forma results assume that the deconsolida…

RPM International Inc. reported slight declines in sales, net income and diluted earnings per share for its fiscal 2011 first quarter ended August 31, 2010. The declines were primarily attributable to the deconsolidation of Specialty Products Holding…

RPM’s net sales of $635.4 million were down 13.2% from the $731.8 million reported a year ago. The net loss for the third quarter was $30.9 million compared to record net income of $12.2 million earned in the year-ago period.
“Sales refle…

RPM’s net sales of $635.4 million were down 13.2% from the $731.8 million reported a year ago. The net loss for the third quarter was $30.9 million compared to record net income of $12.2 million earned in the year-ago period.
“Sales refl…

RPM International Inc. has reported record sales and net income for its fiscal 2008 second quarter ended November 30, 2007. RPM’s record net sales of $905.7 million were up 11.9% from the $809.4 million reported in the fiscal 2007 second quarte…

RPM International, Inc., has reported record sales of $739.4 million for its fiscal 2006 second quarter ended November 30, 2005. Net income for the quarter increased 103% to $18.5 million from $9.1 million a year ago, as a result of lower asbestos re…

Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies. You can obtain detailed information about the use of cookies on our website by clicking on "More information”.